Virtual Point, Inc. v. Hedera AB

Filing 14

ORDER by Judge Yvonne Gonzalez Rogers denying 11 Motion for Alternative Service without Prejudice (fs, COURT STAFF) (Filed on 4/29/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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VIRTUAL POINT, INC., dba Captive Media,
Plaintiff,

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ORDER DENYING MOTION FOR ALTERNATE
SERVICE WITHOUT PREJUDICE

v.

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Case No.: 13-CV-5690 YGR

HEDERA AB,
Defendant.

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Plaintiff Virtual Point Inc. (“Virtual”) brings this complaint against Defendant Hedera AB
United States District Court
Northern District of California

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(“Hedera”), a Swedish limited liability company, for declaratory judgment and unfair competition
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under California Business & Professions Code section 17200 as well as the common law. Virtual
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alleges that there is an actual controversy between it and Hedera in that Hedera has attempted to
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assert alleged ownership rights over the domain name “stabletable.com” by initiating administrative
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proceedings against Virtual. Virtual seeks, by this action, a declaration of no trademark
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infringement or violation of the Anti-Cybersquatting Consumer Protection Act (“ACPA”) on the
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part of Plaintiff, in addition to relief for unfair competition.
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Virtual has filed a motion for alternative service pursuant to Rule 4(f)(3) of the Federal
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Rules of Civil Procedure.
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Having carefully considered the papers submitted, and for the reasons set forth below, the
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Court hereby DENIES the Motion for Alternative Service without prejudice.
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I.

FACTS

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On December 4, 2013, Hedera’s counsel emailed Virtual a copy of a Uniform Domain
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Name Dispute Resolution Policy (“UDRP”) administrative complaint that Hedera filed with the
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World Intellectual Property Organization (“WIPO”), which accused Virtual of registering the
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domain name in bad faith. As part of the UDRP complaint, Hedera was required to list its own
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contact information and the contact information for its authorized representative. The UDRP
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complaint listed, for Hedera, a physical address in Lund, Sweden, as well as a general email

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address ([e-mail]). The UDRP complaint also listed Hedera’s authorized representative,

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counsel Susanne Lindeskog, her post office box address in Malmö, Sweden, and her email address.

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Lindeskog notified Virtual of the UDRP action by email from her email address, and

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communicated with Virtual’s counsel via that address.
On December 10, 2013, Virtual filed the instant action. That same day, Virtual’s counsel

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emailed Lindeskog with a copy of the complaint and summons for the action herein. Lindeskog

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responded that she was not authorized to accept service of process for her client, but at the same

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time inquired as to whether Virtual would consider a mutually-agreeable resolution of this and the

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UDRP complaint.
On December 17, 2013, Virtual’s counsel sent a copy of the complaint and summons, along

United States District Court
Northern District of California

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with a waiver of service, to Lindeskog’s post office box address via U.S. First Class Mail. On

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December 18, 2013, Virtual’s counsel sent the same documents to Hedera’s contact address listed

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in the UDRP complaint, addressed to “Sven Henningson,” identified in Virtual’s papers as

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Hedera’s “director.” Virtual also emailed the documents to the general email and to Lindeskog’s

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email, as listed on the UDRP complaint. In an email from Lindeskog dated December 18, 2013,

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she acknowledged the instant action had been filed, and again broached the subject of a settlement

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resolving the administrative complaint along with this action. Hedera did not return an executed

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waiver form prior to the filing of this motion.

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II.

DISCUSSION

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A.

Service by Email

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Virtual seeks an order permitting service by alternative means under Rule 4(f)(3). Rule 4

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“was designed ‘to provide maximum freedom and flexibility in the procedures for giving all

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defendants ... notice of commencement of the action and to eliminate unnecessary technicality in

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connection with service of process’.” Elec. Specialty Co. v. Rd. & Ranch Supply, Inc., 967 F.2d

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309, 314 (9th Cir. 1992) (citing 4 C. Wright & A. Miller, FEDERAL PRACTICE AND PROCEDURE §

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1061, at 216 (2d ed. 1987).) At the same time, due process requires that service of notice be

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“reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the

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action and afford them an opportunity to present their objections.” Mullane v. Central Hanover

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Bank & Trust Co., 339 U.S. 306, 314 (1950); Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d

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1007, 1016 (9th Cir.2002).
Rule 4(h)(2) authorizes service of process on a foreign business entity in the manner

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prescribed by Rule 4(f) for individuals. F.R.C.P. 4(h)(2). Rule 4(f)(3) permits service on

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individuals in a foreign country as follows: “Unless federal law provides otherwise, an individual ...

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may be served at a place not within any judicial district of the United States: ... (3) by other means

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not prohibited by international agreement, as the court orders.” F.R.C.P. 4(f)(3). It is left “to the

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sound discretion of the district court the task of determining when the particularities and necessities
of a given case require alternate service of process under Rule 4(f)(3),” consistent with

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United States District Court
Northern District of California

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constitutional norms of due process. Rio Properties, 284 F.3d at 1016. While plaintiffs are not

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necessarily required to attempt service under Rule 4(f)(1) or (2) first, they must still make a factual

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showing justifying court approval of the alternative method. Id. at 1016. Thus, for instance, the

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Ninth Circuit has approved service on foreign defendants by email pursuant to Rule 4(f)(3) where

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the defendants were either unreachable by other means or had no known physical address. Id. at

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1017. Where a plaintiff “presented the district court with its inability to serve an elusive

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international defendant, striving to evade service of process,” it “need not have attempted every

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permissible means of service of process before petitioning the court for alternative relief.” Id. at

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1016.

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Virtual argues that, based upon the totality of the circumstances, service on Hedera by the

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alternate means of email would be sufficient. Virtual submits that: (1) Hedera’s counsel in the

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administrative proceeding is aware of the lawsuit, as evinced in several emails; and (2) Virtual sent

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Hedera and Hedera’s counsel waiver forms for the summons and complaint in this action via first

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class mail, FedEx, and email. Virtual further contends that requiring it to perfect traditional service

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upon Hedera would be a waste of time and money because Hedera is located in Sweden, “is fluent

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in English,” is represented by counsel fluent in English (both in Sweden and within this District),

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and has shown a preference to communicate via email with Plaintiff and its counsel.

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Virtual has not shown that the alternative means of service it proposes – service on Hedera’s

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counsel’s email and on Hedera’s general “[e-mail]” email—is reasonably calculated

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under all the circumstances to apprise Hedera of the lawsuit. While service by email may be

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appropriate in certain circumstances, it is generally approved only after a showing that a traditional

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means of service were attempted or were not reasonably possible. Cf. Facebook, Inc. v. Banana

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Ads, LLC, C-11-3619 YGR, 2012 WL 1038752 (N.D. Cal. Mar. 27, 2012) (service by email

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appropriate where company was involved in commercial internet activities, communicated by

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email, and “Facebook has demonstrated that it has made attempts to serve the Defendants at

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physical addresses that proved unsuitable for service”); Williams-Sonoma Inc. v. Friendfinder Inc.,
C06-06572 JSW, 2007 WL 1140639 (N.D. Cal. Apr. 17, 2007) (email service approved where

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United States District Court
Northern District of California

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attempted to effect service but unable to do so due to incorrect physical addresses or refusal to

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accept); Aevoe Corp. v. Pace, C 11-3215 MEJ, 2011 WL 3904133 (N.D. Cal. Sept. 6, 2011)

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(mailings to defendant returned, no response to phone calls, could not be located by investigator,

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unsuccessful attempts at personal, substitute, and mail service); Balsam v. Angeles Tech. Inc., C06-

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04114 JFHRL, 2007 WL 2070297 (N.D. Cal. July 17, 2007) (unable to serve by traditional means

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because contact information provided to domain name registrars was incorrect, and each package

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served to the listed addresses was “undeliverable” or or the party refused to sign for it).

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Here, Virtual has a physical address for Hedera, but has not attempted to serve the summons

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and complaint at that address. Indeed, the only reasons offered by Virtual for not attempting

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service at this address is the cost of translating the complaint and summons in Swedish ($1,215,

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according to counsel’s declaration), and unspecified costs of service via Sweden’s Central

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Authority consistent with Hague Convention requirements. Hedera apparently knows about the

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existence of the instant action. Indeed, Virtual tried, unsuccessfully, to stay the decision on

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Hedera’s UDRP complaint based on the pendency of this action. (See McCann Dec., Exh. H at 3-

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4.) However, Virtual has not shown that it made reasonable efforts to apprise Hedera of the

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summons and complaint by way of service at Hedera’s known physical address or by other, usual

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means. While service by those usual means is not required in order to establish a basis for

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alternative service, good cause for a court order to serve by alternative means is. Virtual cannot

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merely leapfrog over those means authorized by the Hague Convention or other usual methods

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deemed to be “reasonably calculated to give notice,” as stated in Rule 4(f)(1) and (2), without a

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sufficient reason to do so.

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B.

Request for Costs of Service

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Virtual also seeks expenses incurred in making service under Rule 4(d)(2), including

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attorneys’ fees in connection with this motion. As stated in Rule 4(d)(2), such expenses may be

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required to be paid when “a defendant located within the United States fails, without good cause, to

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sign and return a waiver requested by a plaintiff located within the United States.” Thus, by its

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terms, the provision does not apply to a defendant located in a foreign country. Virtual offers no
authority that would permit it to obtain its attorneys’ fees or costs in these circumstances.

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United States District Court
Northern District of California

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III.

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CONCLUSION
Accordingly, the Motion for Alternative Service is DENIED. This order is without prejudice

to a renewed motion based upon additional evidence.

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This terminates Docket No. 11.

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IT IS SO ORDERED.

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Date: April 29, 2014

_______________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

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